Legal revolution leads to confusion

Employment
problems abound across the whole of Europe, and Western European countries are
also wrestling with legislative change. Bo Jones reports

There
is little doubt that the downturn in the US economy is causing ripple effects
on the other side of the Atlantic. Like their American counterparts, companies
across Europe are announcing profit warnings and laying off staff.

But
while people are moving out through one door, others are still coming in
through the other. All across the region there is still a severe shortage of
specialists in many disciplines – IT professionals, marketers and finance are
still in short supply. And firms are having to fight harder and harder to
attract the talent they need.

Kasper
Eldam, editor of the Danish management consultancy EHR, has a sound piece of
advice for European HR executives struggling to be the employer of choice.
"It is extremely important to differentiate between candidates you want to
recruit, and to adopt a suitable strategy," he says.

"There
is a huge difference in recruiting different sorts of workers – general
managers, IT workers and so on – so it is critical that you are prepared to
meet the different demands, questions and ambitions of these types of
employees, and that you do not employ the same recruitment procedure for all of
them," he adds.

In
Denmark, in particular, he sees "company morals and ethics as being
important for some candidates in terms of environment, firm policy, work and so
on".

As
a result, the organisations in Denmark that are looking to attract new hires
are increasingly using "green balance sheets, social balance sheets and
ethical balance sheets", he says.

But
while the market in Western Europe may still be candidate-driven, the situation
in Central and Eastern Europe has, to some extent, taken a dramatic turn
following the recent rouble crisis.

"Until
the crisis," recalls Eric Ligtenbelt, managing director Ukraine, Baltics
and Central Europe of executive search and selection consultancy Commonwealth
Resources, "it was very much a candidate-driven market, but that has
changed considerably. Now there are enough qualified people in the
region."

But
despite the abundance of talent in CEE, companies are still very cautious about
recruiting new hires to fuel their business ambitions. In the Ukraine, for
example, explains Ligtenbelt, "a Soviet-type employment system still
exists, meaning that a company is seen as having to provide employment".

He
continues, "Once you’ve hired an individual, it is extremely difficult to
get rid of them even if they are underperforming. Three formal written warnings
have to be given within a set period of time. These warnings are often heavily
disputed by the employee and during that time you can miss the period in which
they can be dismissed. Then, the whole process has to start again from the
beginning."

However,
he admits, there is a new generation of employees – the 25- to 35-year-olds –
who are looking to make a career for themselves. Although they are aware of
employment laws and the ease with which they can stay with one firm, they tend
to be much more flexible and willing to move from company to company if they
find better prospects elsewhere.

Hungary,
too, has a stringent labour code. According to the Federation of European
Employers, the Hungarian government "specifies various conditions of
employment, including termination procedures, severance pay, maternity leave,
training, union consultation rights in the context of some management decisions,
annual and sick leave entitlement, and labour conflict resolution
procedures".

The
labour laws of Western Europe are less strict in most countries. But despite
their comparative leniency, they can be just as complex and open for discussion.

In
France, for example, employers are grappling with the introduction of the
35-hour week, which was brought in by legislation last year. Introduced with
the aim of combating unemployment in the country (currently among the highest
in the European Union), the 35-hour working week is expected to create 500,000
jobs by 2003.

But
despite its good intentions it has thrown up a whole host of other staffing
issues for firms, among them the definition of legal working time, overtime and
compensation, the issue of part-timers and distinction of different levels of
employees.

The
Netherlands also saw discussion about working hours last year with a new item
of employee-oriented working time flexibility legislation being introduced that
gives employees the right to request an extension or a shortening of their
working hours.

The
government in Belgium is also encouraging social partners to discuss working
time reduction and has agreed to reduce the maximum working week from the
current 39 hours to 38 hours by 2003. Spain has opened the debate over a
35-hour week, although no formal decision has yet been made.

In
Germany, new laws mean that employees have the right to request a reduction in
working hours to become part-time employees and an employer cannot refuse them
without a valid reason.

In
the UK, employment laws are currently more focused on discrimination than
working time. In particular, age discrimination, with the government advocating
a code of practice on age diversity in employment.

And
in Denmark, the political agenda is more geared towards the right to
transparency in salary and the legal protection of part-time workers. As EHR’s
Eldam laments, "The legal problems always seem to evolve when employees
are sacked because of cutbacks and rationalisation, because the reasons have to
be impartial." This is particularly true in the case of mergers and
acquisitions, an ever more common event in today’s global world of business.

"The
conditions of benefits, salary negotiations, insurance and the like must be in
place in formal contracts before the merger or takeover happens. In that way
conflicts over which company policy or rules are to be followed in the future
can be eliminated," he advises.

But,
he adds, "M&As often result in dismissals and in Denmark, these can be
difficult to justify in a legally acceptable way."

Top
tips for hiring in Europe

–
Don’t oversell the job and the company culture to the candidate, it will
backfire on you.

–
Don’t expect the candidate to be loyal to your company – you cannot guarantee
them a job for life (and they probably wouldn’t want it anyway) so they should
not be expected to promise to stay with you forever.

–
Don’t ask if a potential female employee is pregnant or planning to become
pregnant. This still happens across the region and is a real
"turn-off" for candidates.